Chinese Encounters in Southeast Asia

How People, Money, and Ideas from China Are Changing a Region

Pál Nyíri, Danielle Tan, P�l Ny�ri, Danielle Tan

• Publisher: University of Washington Press
• Year: 2016
• ISBN:
  9780295999319
• Topic: Histoire
• Subtopic: Histoire de la Chine

This is the first book to focus explicitly on how China's rise as a major economic and political actor has affected societies in Southeast Asia. It examines how Chinese investors, workers, tourists, bureaucrats, longtime residents, and adventurers interact throughout Southeast Asia. The contributors use case studies to show the scale of Chinese influence in the region and the ways in which various countries mitigate their unequal relationship with China by negotiating asymmetry, circumventing hegemony, and embracing, resisting, or manipulating the terms dictated by Chinese capital.

PART 1

IDENTITIES

1 INVESTORS, MANAGERS, BROKERS, AND CULTURE WORKERS

How Migrants from China Are Changing the Meaning of Chineseness in Cambodia

PÁL NYÍRI

THE INFLUX INTO CAMBODIA OF CAPITAL FROM CHINA, WHICH began in earnest in 1999 and accelerated in the mid-2000s, has fundamentally altered what could be termed the political economy of Chinese ethnicity in Cambodia and with it the relationship between Chinese Cambodians and new migrants from China. Mainland China weighs increasingly heavily not only on the livelihoods of different Chinese groups in Cambodia but also on the ways their members conceptualize and express their ethnic belonging. Existing studies have looked at the revival of Chinese ethnicity in Southeast Asia, focusing on the revitalization of local Chinese heritage in the context of more permissive ethnic politics and on new local forms of Chineseness among the young (e.g., Hoon 2008). This literature points to how economic dependence and a sense of cultural marginality can favor the reconceptualization of a homogeneous Chinese ethnicity with the People’s Republic of China (PRC) as the center and set limits to the diversity of the global “Sinophone sphere” that has been stressed by such scholars as Shumei Shih (see, e.g., Shih, Tsai, and Bernards 2013). In this sense, it is perhaps more accurate to speak not of a “resinicization” (Duara 1997, 40) of Chinese Cambodians—a term sometimes used to refer both to the emergence of Chinese nationalism in Southeast Asia in the late nineteenth century and the revival of Chinese ethnicity today—but of their retransnationalization: a return to an identity politics in which, as at the turn of the twentieth century, being Chinese is defined in relation to a territorial Chinese state (see Karl 2002; Vasantkumar 2012, 438).

China has topped the foreign investment chart of the Council for the Development of Cambodia (CDC) most years since 2004, reaching US$9.17 billion by 2012. At least two-thirds of that comes from engineering procurement contracts. These projects—dams, irrigation projects, roads, bridges, and real estate—are contracted out mainly to state-owned companies from China, and each employs a large amount of Cambodian labor, up to ten thousand in total, most of it via private subcontractors (Zhongguo Jingjiwang 2011). While the capital invested in garment manufacturing and plantations has been far smaller, the impact of investment from China on employment in these sectors has been significant. According to the CDC, Chinese agricultural investments—land concessions to fell timber and grow rice, cassava, and other cash crops for export—have employed some 140,000 Cambodians (Wang Ying 2010). The garment industry is the country’s largest employer after the government; between 2000 and 2008, that industry employed more than 355,000 Cambodians (Tong 2010), overwhelmingly women. Managers of state enterprises that construct hydropower plants and roads—as well as private investors and managers in mining, agricultural land concessions, and garment manufacturing—are wielding increasing influence and beginning to shape labor practices.

The contemporary wave of migration from China to Cambodia started in the early 1990s. Researchers at the time found an antagonistic relationship between Cambodians of Chinese descent (Sino-Khmers) and more recent Chinese migrants, with the former seeing the latter as marginal and suspect outsiders associated with small-scale illicit trade (Edwards 2002). Although petty entrepreneurs continue to make up the largest segment of new migrants—data are unreliable, but Zhuang Guotu’s (2008) estimate of fifty thousand to a hundred thousand appears realistic—they are now in a far better position to insert themselves as providers of flows of capital, information, and culture from mainland China and brokers between these flows and the sizable Chinese-Cambodian population, which is central to the Cambodian economy (Nyíri 2011). Meanwhile, for both the increasingly entrenched Chinese-Cambodian elite and the struggling Chinese-Cambodian middle classes, capital from China creates business opportunities and jobs. Many Cambodian Chinese and Sino-Khmer compete with, but also rely on, new Chinese migrants to act as middlemen, both between Chinese capital and the neopatrimonial Cambodian state and between Chinese managers and Khmer labor.¹ This role is predicated upon a display of Chineseness whose form and content is itself rapidly changing under the influence of an increasing number of teachers and journalists who come from the mainland to run Cambodia’s Chinese-language press and schools.

This chapter, based on four short (one- to two-month) periods of interviews and ethnographic fieldwork focusing on new Chinese migrants in Phnom Penh, Battambang, and Kampot between 2007 and 2011, attempts to make sense of the facets of this change. Unlike in earlier historical periods, public articulations of what it means to be Chinese in Cambodia today are increasingly shaped not by Sino-Khmer cultural elites but by transnational relationships centered on China as a new friend of Cambodia. Desirable attributes of Chineseness include an entrepreneurial acumen that works to support cooperation between the two friendly governments and the possession of cultural and linguistic skills that conform to the standards of Chinese culture as understood in the People’s Republic of China.

INVESTMENT FROM CHINA AND THE ECONOMIC POSITION OF THE SINO-KHMER

Cambodia’s ethnic Chinese largely descend from trade and labor migration before and during the French colonial period. As in Thailand, they intermarried extensively and retained their languages (predominantly Teochiu) and separate identities to varying degrees, Chinese identity being stressed mostly in trade settings while downplayed by those in government service. As elsewhere in Southeast Asia, the beginning of the twentieth century witnessed a simultaneous rise of both Cambodian and Chinese nationalism, attracting a share of ethnic Chinese. Uniquely in the region, after Cambodia declared independence under King Sihanouk, who was favorably disposed toward the PRC, the Sino-Khmer retained their dominance of the urban bourgeoisie even as Chinese schools switched to the simplified script used in mainland China and imported teaching materials and even teachers from there.²

After a devastating interruption that lasted from Lon Nol’s US-backed coup in 1970 until the Vietnamese troops that had ousted Pol Pot withdrew in 1989, the ethnic Chinese largely recovered their central role in the economy of urban Cambodia as importers, wholesalers, and retailers of goods and services. In fact, from the mid-1980s, despite continuing guerrilla warfare and restrictions on private business, Sino-Khmer entrepreneurs played a crucial role in supplying the country with foodstuffs and daily necessities, as well as cigarettes and liquor from Thailand and Singapore, largely through informal channels operating in an officially planned economy of severe scarcity (Tan 2006, 139–141; see, e.g., Verver 2010). Discrimination against those of Chinese descent in state job allocations under the Vietnamese-backed regime installed in 1978 may have contributed to the renewed concentration of the Sino-Khmer in private business and thus, over time, ironically hastened the reemergence of a wealthy elite identified as ethnically Chinese.

After the Vietnamese withdrawal in 1989 and the legalization of private business, this commerce expanded rapidly. As shops reopened, business was reidentified with Chinese ethnicity through such markers as couplets in Chinese characters or small altars to the god of wealth, whether or not the proprietors could actually read or speak Chinese. In 1990, when the partystate permitted (indeed, instructed) Chinese associations to operate again, Chea Sim, president of the legislature both then and today, told members of the preparatory committee of the new Cambodian-Chinese umbrella organization: “Most Khmers want to be government officials; they don’t like business and are not good at it…. You should unite and liaise with your relatives and friends overseas, attract foreign investment and become a bridge to developing the economy” (Yang Bo 2003). This deal—encouraging Chinese Cambodians to pursue wealth in return for support of the ruling party—has been at the basis of the policies of the Cambodian People’s Party toward the ethnic Chinese ever since.

Meanwhile, the goods on sale included an increasing range of imports from China. As early as 1991, Chinese-made consumer goods were being sold at Phnom Penh’s markets (Edwards 2002, 271). As in other “transitional economies” around the same time (for example, in Eastern Europe), demand for such low-priced goods propelled the initial wave of new migrants from the PRC (Nyíri 2011). But unlike in neighboring Laos (Tan 2011), in Cambodia the bulk of retail remained in the hands of Chinese-Cambodian entrepreneurs, who had access to real estate and were familiar with official procedures and patronage networks necessary for running a business. As the Cambodian economy expanded and the dominance of mainland Chinese as suppliers grew, reliable partnerships with them became increasingly important for Chinese-Cambodian businesses. For Sino-Khmer businesspeople at various levels, contracts with mainland Chinese entrepreneurs or matching Chinese investors with Cambodian business opportunities—and the personal and political connections these required—became increasingly attractive as the country was flooded with Chinese capital.

Mr. Wu’s career exemplifies the increasing reliance of what can be described as a struggling Chinese-Cambodian middle class on these economic flows.³ Born in China, he was brought to Cambodia in 1945, when he was seven months old. In the 1990s Mr. Wu started a business subcontracting for construction projects. He prefers to work with companies from China, since in his experience they pay more reliably than Cambodian or Korean companies, and they are strict about quality. He picks up small contracts, worth a few hundred thousand dollars—such as digging canals, lining reservoir walls, laying concrete, and building small bridges—for large, multimillion-dollar construction projects (dams, roads, and irrigation systems), financed by aid or loans from China and carried out by Chinese state enterprises as general contractors. Mr. Wu often deals with private companies from China that subcontract parts of these projects and in turn farm out jobs that do not require special skills. He recruits and supervises between fifty and two hundred local workers to execute the work under the inspection of technicians from China. Typically, each construction project employs several such teams. Personal relationships are decisive in winning these subcontracts, so Mr. Wu spends much of his time trying to find informal ways to get to know managers in positions of authority at construction projects. Simultaneously, he offers his services as a scout to businessmen from China interested in investing in Cambodia. He identifies opportunities, finds local partners, arranges visits, takes care of contracts and approvals, and sometimes provides labor.

In addition to business opportunities, investment from China also generates direct employment for Chinese Cambodians who can speak some Chinese. Many graduates of Chinese schools in the country find jobs with Chinese-owned garment and shoe factories and construction companies as interpreters, clerks, drivers, and shift supervisors. Managers from China believe that Chinese Cambodians are culturally primed to understand the expectations of management regarding labor discipline and behavior. They are therefore expected to function as cultural brokers of sorts, ensuring that Khmer workers comply with management instructions and do not make trouble. Many younger people acquired their Chinese education after the reopening of Chinese schools in 1992 and see employment with Chinese companies as a vehicle of upward mobility. Some older Chinese Cambodians who went to school before Lon Nol banned Chinese education in 1970 are also employed in these jobs.

At the other end of the spectrum are wealthy Chinese-Cambodian businessmen who cultivate clientelistic relations with the party-state elite and have privileged access to natural resources (Hibou 2004; Bayart 2005; Mengin 2007, 25–29). Some of them made their initial fortunes in the informal foreign trade in the late 1980s; others fled the Khmer Rouge and returned to Cambodia after the 1992–1993 UN intervention. Many of these wealthy Chinese-Cambodian businessmen hold the noble title oknha (sometimes translated into English as “lord”), granted by the king. This title requires the payment of at least two hundred thousand dollars to the state (Xing 2008, 373), but its holders have official tax privileges and informal authority. At the top of this group are tycoons who combine formal political power—for example, as senators for the ruling Cambodian People’s Party (CPP)—with great wealth and informal but widely rumored connections to longtime prime minister Hun Sen and other top leaders and the military (Verver and Dahles 2014). Such oknha are in great demand by investors from China, particularly those who wish to acquire land concessions, because such concessions, by law, require a majority stake of a Cambodian company. As a manager of the Cambodian office of a mainland Chinese state enterprise put it to me: “The first thing Chinese companies do when they get here is find a backer (kaoshan), like an oknha, who will help them get through various difficulties, liaise with government officials, and so on. Whether or not you will later have to share profits—that varies. But first you have to pay.”

A particularly well-known example is Senator Oknha Lau Meng Khin, who holds stakes in high-profile mainland investments that range from a controversial two-hundred-thousand-hectare timber concession granted to Wuzhishan, an affiliate of a state agricultural company from China, to the Sihanoukville Special Economic Zone, developed by a private garment manufacturing company from China, and the highly contested real estate development on the site of Boeung Kak Lake in Phnom Penh. These oknha also play a role in the distribution of concessional loans from China. This is significant because more than half of current infrastructure projects in Cambodia are backed by concessional loans from one of China’s two policy banks, making China one of the largest sources of development assistance in Cambodia. The loans are made directly to Chinese enterprises, and the initiative to finance a particular project generally comes from one of these banks, in consultation with Cambodian ministries (Sato et al. 2011). The oknha play a crucial role as brokers between the two sides, but in practice they are frequently responsible for identifying the projects in the first place.

Oknha Keth, an avuncular septuagenarian, comes from a wealthy Chinese-Cambodian family. In 1971 he moved to Hong Kong to join a relative and eventually became a partner in a toy factory. After returning in 1998, he has been involved in a gamut of business projects and accumulated a diverse collection of titles, from adviser to a senior general (which gives him the right to use a Cambodian diplomatic passport) to chairman or director of several national sports and cultural organizations.⁴ When I first met Oknha Keth in 2008, his company was a contractor for several Chinese-financed irrigation, construction, and mining projects, including the one Mr. Wu later worked on. Oknha Keth’s position in the contracting chain, however, was much higher than Mr. Wu’s: he said he had been involved in negotiating financing for the project from one of China’s policy banks. The ribbon at the inaugural ceremony of the project was cut by Xi Jinping, soon to become China’s top leader.

Oknha Keth’s company was also involved in developing an enormous seaside resort, with a total acreage of fifteen square kilometers and a pledged investment of US$3.8 billion by a private developer from China. It held a sixty-thousand-hectare timber concession, which was being worked by a private company from Shanghai, and was involved in two massive real estate developments outside Phnom Penh: a new government office district and a luxury residential development. Companies from China were to supply the water and electrical systems for both developments but were not involved in financing. Finally, Oknha Keth was co-owner of a garment factory with ten thousand workers and had a number of large interior decoration contracts for multinational and Cambodian companies.

In most of these projects Oknha Keth’s company invested little or nothing; instead, it simply inserted itself as a broker between two steps in the process, often both carried out by actors from China. Its ability to do so was probably due to Oknha Keth’s perceived or real connections to powerful patrons in Cambodia (“We talk to Hun Sen directly and we might even be able to get the price down to three hundred dollars” per hectare, he told me about a particular real estate project), but perhaps also aided by the fact that it created the semblance of local contracting. (In the case of the land concession, this was required by Cambodian law.) Oknha Keth’s high-profile involvement in national sports organizations ensured him regular television publicity and control over a particular government monopoly. Yet it also came with the obligation to find investors to finance prestigious government sports projects. If Oknha Keth succeeded, the contracts might bring him large profits; if he failed, he might have to spend his own capital and risk falling out of official favor: the revenue farmer’s dilemma, a quandary emblematic of a broker straddling the worlds of state power and private capital.

MIGRATION FROM CHINA AND THE POLITICAL ORIENTATION OF CHINESE ORGANIZATIONS IN CAMBODIA

In 1990, Chea Sim invited eleven Chinese-Cambodian businessmen to his office and encouraged them to form an association that came to be known as the Association of Chinese in Cambodia (ACC,...